January 29, 2021
More Americans are working from home than ever, creating a trend that’s expected to continue for the foreseeable future. A survey by Gartner, a global research and advisory firm, found that 80% of company leaders plan to allow employees to work at least part of the time remotely once the pandemic is over, and 47% will allow employees to work from home full-time.
This trend directly impacts how consumers spend their home improvement dollars as they allocate more money toward making the home office less of a makeshift environment and more of a robust, permanent part of the domicile. Here are a few brands whose top and bottom lines are positively impacted by work-at-home trends.
One direct beneficiary of the home office trend is Wayfair Inc. (Tii:W), which posted quarterly losses consistently since its founding in 2002. The online furniture purveyor turned things around last year, posting net income of $173.16 million for its third quarter ended September 30. This was in sharp contrast to a year-ago loss of more than $654 million as Wayfair added 28.8 million active customers, a 51% year-over-year increase. With that growth, it’s unsurprising that Wayfair stock is up some 200% over the last 12 months.
The pre-installed webcams and mics that come with most laptops are typically not of the best quality. With daily videoconferencing the norm these days, audio/video equipment manufacturers like Logitech International S.A. (Tii:LOGI) are generating strong sales. The company reported sales of $1.67 billion for its fiscal third quarter, up 85% over the same quarter last year. Logitech also raised its fiscal 2021 annual outlook to between 57%-60% sales growth. Over the last 12 months, shares of the electronics equipment manufacturer have gained some 140%.
Another industry to reap the benefits of increased home-based videoconferencing traffic is broadband providers. Consumers upgrading their home’s bandwidth to accommodate new demands is good news for providers such as Comcast Corporation (Tii:CMCSA). The company reported that it added 538,000 net new broadband customers last year, which contributed to a 2.4% and 7.4% rise in revenues and EPS, respectively. AT&T Inc. (Tii:T) added more than 1 million additional customers last year, citing “continuing subscriber growth in wireless, fiber” in its earnings release and projected revenue growth for 2021.
Millions of consumers took the opportunity to upgrade their hardware to ensure they remain productive while working at home. This was good news for manufacturers like Apple Inc. (Tii:AAPL), which reported record revenue and earnings for its fiscal first quarter ended December 26, 2020. Dell Technologies Inc. (Tii:DELL), a major competitor in this space, reported that sales for its Client Solutions Group – the segment that consists of sales to commercial and consumer customers of desktops, notebooks and related products – increased 8% to a record $12.3 billion.
With remote workers at home all day, more are stepping up their game in the kitchen as opposed to ordering from the corner delicatessen. In its most recent earnings release, Hamilton Beach Brands Holding Co. (Tii:HBB) reported that “unprecedented demand in the U.S. and Canada continues as homebound consumers engage in meal and beverage preparation more often during the pandemic.” A leading designer, marketer and distributor of a wide range of branded small electric household and specialty housewares appliances, the company’s top products include slow cookers, digital multicookers, among others. While Hamilton Beach posted a decline in third-quarter revenues due to COVID-19 and other factors, it expects operating profit for the second half of 2020 to increase approximately 20%.
The work-from-home trend seems to be here to stay. There is little doubt that these and other products and services will rise to meet this quantum shift in workforce dynamics – creating new investment opportunities along the way.
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